VA awards $2.1M for RF Systems-Hybrid, with Philips North America LLC as the contractor

Contract Overview

Contract Amount: $2,099,671 ($2.1M)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-19

End Date: 2026-12-31

Contract Duration: 833 days

Daily Burn Rate: $2.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Healthcare

Official Description: MODALITY: RF SYSTEMS-HYBRID OR PURCHASE ORDER: 537B38032/537B38036 STATION: JESSE BROWN VAMC REQUIREMENT: SEP FY2023 CONSOLIDATION

Place of Performance

Location: BOTHELL, SNOHOMISH County, WASHINGTON, 98021

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.1 million to PHILIPS NORTH AMERICA LLC for work described as: MODALITY: RF SYSTEMS-HYBRID OR PURCHASE ORDER: 537B38032/537B38036 STATION: JESSE BROWN VAMC REQUIREMENT: SEP FY2023 CONSOLIDATION Key points: 1. Contract awarded to a single, established vendor, suggesting potential for streamlined delivery but also limited price negotiation. 2. The fixed-price contract with economic price adjustment aims to mitigate inflation risks for both parties. 3. The contract duration of 833 days indicates a medium-term need for these specialized systems. 4. The award falls under the Irradiation Apparatus Manufacturing industry, highlighting a niche but critical area of medical technology. 5. The Department of Veterans Affairs is the contracting agency, indicating a focus on supporting veteran healthcare infrastructure.

Value Assessment

Rating: good

The contract value of approximately $2.1 million for RF Systems-Hybrid appears reasonable given the specialized nature of the equipment and the fixed-price with economic price adjustment structure. Benchmarking against similar contracts for advanced medical imaging or radiation equipment would provide a more precise value-for-money assessment. However, the award to a known entity like Philips North America LLC suggests a level of established pricing and product quality.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 5 bids suggests a healthy level of interest in this requirement. This competitive process is expected to have driven pricing towards a market-based level, offering a good outcome for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that typically leads to better pricing and value.

Public Impact

Veterans receiving advanced medical imaging and treatment services at the Jesse Brown VAMC. Improved diagnostic capabilities and treatment options for a range of medical conditions. Support for the operational readiness and technological advancement of a key VA medical facility. Potential for enhanced patient outcomes and reduced healthcare delivery times.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if this specific modality becomes standard without ongoing competitive review.
Economic price adjustment clauses can lead to cost increases if market prices for components or labor rise significantly.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Contract awarded to a reputable manufacturer with a track record in medical technology.
The fixed-price component provides a baseline cost certainty.

Sector Analysis

The contract falls within the broader medical equipment manufacturing sector, specifically focusing on RF (Radio Frequency) systems, which are integral to various diagnostic and therapeutic applications, including imaging and radiation therapy. The market for such specialized medical technology is characterized by high barriers to entry due to research and development costs, regulatory hurdles, and the need for specialized expertise. Spending in this area by government agencies like the VA is crucial for maintaining and upgrading healthcare infrastructure to provide advanced patient care.

Small Business Impact

The data does not indicate any specific small business set-asides or subcontracting requirements for this contract. Given the specialized nature of RF systems and the award to a large, established company like Philips North America LLC, it is less likely that small businesses would be primary contractors. However, opportunities for small businesses may exist further down the supply chain as subcontractors, depending on the prime contractor's sourcing strategy.

Oversight & Accountability

The Department of Veterans Affairs has established oversight mechanisms for its contracts, including performance monitoring and financial accountability. The contract's fixed-price nature with economic price adjustment provides a degree of cost control, while the delivery order structure allows for phased implementation and oversight. Transparency is generally maintained through contract databases, though specific performance metrics and IG involvement would depend on the contract's detailed terms and any potential issues that arise.

Related Government Programs

VA Medical Equipment Procurement
Radiological and Electromedical Apparatus Manufacturing
Federal Healthcare IT Spending
Department of Veterans Affairs Capital Investments

Risk Flags

Potential for cost overruns due to economic price adjustment clause in inflationary environments.
Reliance on a single vendor for specialized equipment could limit future flexibility.
Ensuring seamless integration with existing VAMC IT infrastructure and workflows.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.1 million to PHILIPS NORTH AMERICA LLC. MODALITY: RF SYSTEMS-HYBRID OR PURCHASE ORDER: 537B38032/537B38036 STATION: JESSE BROWN VAMC REQUIREMENT: SEP FY2023 CONSOLIDATION

Who is the contractor on this award?

The obligated recipient is PHILIPS NORTH AMERICA LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $2.1 million.

What is the period of performance?

Start: 2024-09-19. End: 2026-12-31.

What is the historical spending pattern of the Department of Veterans Affairs on RF Systems-Hybrid or similar modalities?

Analyzing historical spending by the VA on RF Systems-Hybrid and comparable medical equipment provides crucial context for the current $2.1 million award. While specific data for 'RF Systems-Hybrid' might be granular, broader trends in VA spending on advanced medical imaging, radiation therapy equipment, and related capital investments can be examined. Typically, the VA invests significant sums in upgrading its medical technology to ensure veterans receive state-of-the-art care. Spending often fluctuates based on budget allocations, identified needs for equipment replacement or modernization, and the introduction of new technologies. A review of past VA budget justifications and contract awards for similar equipment categories would reveal whether this $2.1 million represents a typical, increased, or decreased investment level for such systems, helping to assess its significance within the VA's overall capital expenditure strategy.

How does the pricing of this contract compare to similar RF Systems-Hybrid procurements by other federal agencies or large healthcare systems?

Benchmarking the pricing of this $2.1 million contract against similar RF Systems-Hybrid procurements is essential for evaluating value for money. This involves comparing the per-unit cost, total contract value, and included features against awards made by other federal agencies (e.g., Department of Defense, other civilian agencies) or large non-federal healthcare systems. Factors such as contract duration, warranty, maintenance agreements, and the specific technical configuration of the RF systems can influence price differences. If this contract's pricing is significantly higher or lower than comparable awards, it could indicate either exceptional value or potential overspending. Accessing public contract databases and industry reports can facilitate this comparative analysis, providing insights into market rates for this specialized medical technology.

What is Philips North America LLC's track record with the Department of Veterans Affairs and other federal agencies for similar medical equipment contracts?

Evaluating Philips North America LLC's track record with the VA and other federal entities is critical for assessing contractor reliability and performance. This involves reviewing past contracts awarded to Philips for RF systems, imaging equipment, or other relevant medical technologies. Key aspects to examine include on-time delivery, adherence to specifications, contract modifications, past performance evaluations (if publicly available), and any history of disputes or contract terminations. A strong history of successful contract performance with the VA suggests a lower risk for this current award. Conversely, a pattern of issues could raise concerns about potential performance risks, impacting the timely delivery of essential medical equipment to the Jesse Brown VAMC.

What are the specific performance expectations and key performance indicators (KPIs) for this RF Systems-Hybrid contract?

The specific performance expectations and Key Performance Indicators (KPIs) for this RF Systems-Hybrid contract are crucial for ensuring the delivered equipment meets the VA's needs and functions as intended. While not detailed in the provided summary, typical KPIs for such contracts would likely include system uptime and reliability, image quality and diagnostic accuracy, adherence to safety standards, response times for technical support, and successful integration with existing hospital IT infrastructure. The contract's fixed-price nature with economic price adjustment suggests a focus on delivering a defined product, but performance metrics would govern its acceptance and ongoing utility. Understanding these KPIs is vital for the VA's ability to measure the contractor's success and the system's contribution to patient care.

What is the potential impact of the economic price adjustment (EPA) clause on the total cost of this contract over its duration?

The economic price adjustment (EPA) clause in this fixed-price contract allows for modifications to the contract price based on fluctuations in specified economic factors, such as labor costs, material costs, or inflation indices. The potential impact of the EPA on the total cost of this $2.1 million contract over its duration (ending 2026-12-31) depends heavily on the volatility of the underlying economic indicators and the specific formula defined in the contract. If inflation rates are moderate and stable, the EPA's impact might be minimal. However, in periods of high inflation, the EPA could lead to significant cost increases, potentially exceeding the initial $2.1 million estimate. The VA's risk is that the final cost could be higher than anticipated, while the contractor is protected against unforeseen cost escalations.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Irradiation Apparatus Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 36A79724Q0003

Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 22100 BOTHELL EVERETT HWY, BOTHELL, WA, 98021

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,099,671

Exercised Options: $2,099,671

Current Obligation: $2,099,671

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797H17D0022

IDV Type: IDC

Timeline